By COLLIN GALLANT on November 29, 2019.
The company that plans to include Medicine Hat in a network of biodiesel refineries in Alberta has signed a long-term agreement with Canadian Pacific Railway to use at least 2.5 million scrap rail ties as feedstock.
Cielo Waste Solutions announced the supply agreement on Thursday morning and says it means that one of four proposed facilities will move ahead.
In late 2018, the News was first to report that the company had signed agreements to build joint-venture facilities with an investors group, Renewable U, in Lethbridge and Brooks, and Cielo also plans a Calgary-area plant with a related firm.
On Wednesday, Cielo signed a supply agreement with the railway that expires in October 2025, and comes after 18 months of negotiations and testing of the material at Cielo’s prototype plant in Aldersyde, near High River.
The release states ties will be delivered to a “future follow-on waste to energy green (refinery)” proposed by Renewable U.
“CP’s long-term (supply) commitment … will allow us to move forward with the site selection to build our next green refinery, on a joint venture basis, with one of Renewable U Energy Inc.’s subsidiary companies,” said Don Allan, Cielo’s president. “We are excited to be collaborating with CP to showcase to the world how our technology can provide an alternative solution to converting a difficult waste stream into high-grade renewable fuels.”
Officials with Renewable U were not available for comment on Thursday.
In terms of potential location of the first refinery, Grande Prairie is not serviced by CP track, leaving the three southern Alberta proposals as locations where the railroad could deliver directly.
The construction and commissioning costs of each facility is expected to be $25 million. Capital cost is responsibility of the investors, and Cielo would earn a fee for overseeing construction, then half the profits once the capital cost is paid back through operations.
Plant capacity is described as producing 2,000 litres per hour of naphtha, kerosene and high-grade diesel. Work to commission and license the Aldersyde facility, which would become the model for future plants, was extended into the fall this year.
The deadline for Renewable U to finalize an agreement for the franchise rights in Medicine Hat was previously extended to the end of 2019.